Exhibit 10.1                                                        
                                 LEASE AGREEMENT


     This Lease, dated for reference purposes as of May 11, 1998, is made by and
between  SOUTH  BAY/COPLEY  JOINT  VENTURE,  a California  general  partnership,
("Landlord"), and PSW TECHNOLOGIES, INC., a Delaware corporation, ("Tenant").

     Landlord  hereby leases to Tenant and Tenant  hereby leases from  Landlord,
upon the terms and conditions hereinafter set forth, those certain premises (the
"Premises")  situated in the City of Mountain View, County of Santa Clara, State
of  California,  described  as follows:  approximately  ten thousand six hundred
seventy  (10,670)  square feet of rentable floor space commonly known 1380 Villa
Street, located in the building (the "Building"),  as shown cross-hatched on the
site plan (the "Site  Plan")  attached  hereto as Exhibit  "A".  The Building is
located on a larger parcel (the "Parcel") containing other buildings as shown on
the Site Plan (the Building and such other buildings are hereinafter referred to
as the  "Buildings"),  which Parcel is described in Exhibit "B" attached hereto.
In the event  Landlord  subdivides the Parcel in the future into two (2) or more
legal parcels,  the term "Parcel" shall  thereafter refer to the legal parcel on
which the Premises are located.  Except as specifically  provided in Exhibit "C"
attached  hereto,  Landlord  shall  not be  required  to make  any  alterations,
additions or  improvements  to the Premises and the Premises  shall be leased to
Tenant in an "as-is" condition.
        
     The  term of this  Lease  ("Lease  Term")  shall  be for  five  (5)  years,
commencing on June 1, 1998 (the "Commencement  Date") and ending on May 31, 2003
unless sooner terminated pursuant to any provision hereof.  Notwithstanding said
scheduled   Commencement  Date,  if  for  any  reason  Landlord  cannot  deliver
possession of the Premises to Tenant on said date, Landlord shall not be subject
to any liability  therefor,  nor shall such failure  affect the validity of this
Lease or the obligations of Tenant hereunder,  but in such case Tenant shall not
be obligated to pay rent until  possession of the Premises is tendered to Tenant
and the  commencement  and  termination  dates of this Lease shall be revised to
conform to the date of Landlord's delivery of possession.  In the event Landlord
shall permit Tenant to occupy the Premises prior to the Commencement  Date, such
occupancy  shall be subject to all the  provisions of this Lease,  including the
obligation to pay the Monthly Installment of rent, and Common Area Charges.
        
       Rent

     Tenant shall pay to Landlord as rent for the Premises the sum  specified in
Subparagraph 4.B below (the "Monthly  Installment") each month in advance on the
first day of each calendar month,  without deduction or offset,  prior notice or
demand,  commencing on the Commencement Date and continuing  through the term of
this  Lease,  together  with such  additional  rents as are payable by Tenant to
Landlord under the terms of this Lease.  The Monthly  Installment for any period
during the Lease Term  which  period is less than one (1) full month  shall be a
pro rata portion of the Monthly Installment based upon a thirty (30) day month.

     The Monthly  Installment  of rent  payable each month during the Lease Term
shall be the following  respective amounts during the following  respective time
periods:
                   TIME PERIOD                        MONTHLY INSTALLMENT
                6/1/98 thru 5/31/99                                  $24,008.00
                6/1/99 thru 5/31/00                                    25,208.00
                6/1/00 thru 5/31/01                                    26,468.00
                6/1/01 thru 5/31/02                                    27,792.00
                6/1/02 thru 5/31/03                                    29,181.00


     Tenant  acknowledges  that late  payment by Tenant to  Landlord of rent and
other sums due hereunder will cause Landlord to incur costs not  contemplated by
this Lease, the exact amount of which will be extremely  difficult to ascertain.
Such costs include,  but are not limited to, processing and accounting  charges,
and late  charges  which may be imposed on Landlord by the terms of any mortgage
or deed of trust covering the Premises.  Accordingly, if any installment of rent
or any other sum due from Tenant  shall not be  received by Landlord  within ten
(10) days after such  amount  shall be due,  Tenant  shall pay to  Landlord,  as
additional rent, a late charge equal to six percent (6%) of such overdue amount.
The parties hereby agree that such late charge  represents a fair and reasonable
estimate of the costs  Landlord  will incur by reason of late payment by Tenant.
Acceptance of such late charge by Landlord shall in no event constitute a waiver
of Tenant's  default with respect to such overdue amount,  nor prevent  Landlord
from exercising any of its other rights and remedies granted hereunder.
                
     All taxes, insurance premiums, Common Area Charges, late charges, costs and
expenses which Tenant is required to pay  hereunder,  together with all interest
and penalties  that may accrue  thereon in the event of Tenant's  failure to pay
such  amounts,  and all  reasonable  damages,  costs,  and  attorneys'  fees and
expenses  which Landlord may incur by reason of any default of Tenant or failure
on Tenant's  part to comply with the terms of this Lease,  shall be deemed to be
additional rent ("Additional Rent") and shall be paid in addition to the Monthly
Installment of rent,  and, in the event of nonpayment by Tenant,  Landlord shall
have all of the rights and remedies with respect thereto as Landlord has for the
nonpayment of the Monthly Installment of rent.

    Rent shall be payable in lawful money of the United  States of America to
Landlord at 511 Division  Street,  Campbell,  California  95008 or to such other
person(s) or at such other place(s) as Landlord may designate in writing.

     Concurrently with the execution of this Lease, Tenant shall pay to Landlord
the sum of Twenty-Four  Thousand Eight Dollars ($24,008.00) to be applied to the
Monthly Installment of rent first accruing under this Lease.


     Tenant  shall  deposit  the  sum  of  Twenty-Nine  Thousand,   One  Hundred
Eighty-One Dollars  ($29,181.00) (the "Security Deposit") upon execution of this
Lease, to secure the faithful  performance by Tenant of each term,  covenant and
condition of this Lease. If Tenant shall at any time fail to make any payment or
fail to keep or perform any term,  covenant or  condition on its part to be made
or performed or kept under this Lease,  Landlord may, but shall not be obligated
to and without waiving or releasing Tenant from any obligation under this Lease,
use,  apply or retain the whole or any part of the  Security  Deposit (A) to the
extent of any sum due to Landlord;  (B) to make any required payment on Tenant's
behalf; or (C) to compensate Landlord for any loss, damages,  attorneys' fees or
expense  sustained by Landlord due to Tenant's  default.  In such event,  Tenant
shall,  within five (5) days of written  demand by  Landlord,  remit to Landlord
sufficient  funds to restore  the  Security  Deposit  to its  original  sum.  No
interest shall accrue on the Security Deposit. Landlord shall not be required to
keep the Security Deposit separate from its general funds.  Should Tenant comply
with all the terms,  covenants,  and  conditions of this Lease and at the end of
the term of this Lease  leave the  Premises  in the  condition  required by this
Lease,  then said  Security  Deposit,  less any sums owing to  Landlord or which
Landlord is  otherwise  entitled to retain,  shall be returned to Tenant  within
thirty (30) days after the termination of this Lease and vacancy of the Premises
by Tenant.

     Tenant  shall  use  the  Premises  only  in  conformance   with  applicable
governmental laws, regulations,  rules and ordinances for the purpose of general
office and for no other purpose.  Tenant shall indemnify,  protect,  defend, and
hold Landlord  harmless against any loss,  expense,  damage,  attorneys' fees or
liability  arising out of the  failure of Tenant to comply  with any  applicable
law.  Tenant  shall not  commit or suffer to be  committed,  any waste  upon the
Premises,  or any nuisance,  or other acts or things which may disturb the quiet
enjoyment  of any other tenant in the  buildings  adjacent to the  Premises,  or
allow any sale by auction  upon the  Premises,  or allow the Premises to be used
for any unlawful  purpose,  or place any loads upon the floor,  walls or ceiling
which  endanger  the  structure,  or place any harmful  liquids in the  drainage
system of the  Building.  No waste  materials  or refuse shall be dumped upon or
permitted to remain upon any part of the Parcel outside of the Building,  except
in trash  containers  placed  inside  exterior  enclosures  designated  for that
purpose by Landlord.  No materials,  supplies,  equipment,  finished products or
semifinished  products,  raw materials or articles of any nature shall be stored
upon or  permitted  to  remain  on any  portion  of the  Parcel  outside  of the
Building.  Tenant  shall  strictly  comply with the  provisions  of Paragraph 39
below.

              Taxes and Assessments

     Tenant  shall pay  before  delinquency  any and all taxes and  assessments,
license  fees and public  charges  levied,  assessed or imposed  upon or against
Tenant's fixtures, equipment,  furnishings,  furniture,  appliances and personal
property installed or located on or within the Premises. Tenant shall cause said
fixtures, equipment, furnishings, furniture, appliances and personal property to
be assessed and billed separately from the real property of Landlord.  If any of
Tenant's said personal property shall be assessed with Landlord's real property,
Tenant shall pay Landlord the taxes  attributable to Tenant within ten (10) days
after  receipt of a written  statement  from  Landlord  setting  forth the taxes
applicable to Tenant's property.
                
     Tenant shall pay, as Additional  Rent,  Tenant's Pro Rata Share (as defined
below)  of all  Property  Taxes  levied or  assessed  with  respect  to the land
comprising the Parcel and with respect to all buildings and improvements located
on the Parcel which become due or accrue  during the term of this Lease.  Tenant
shall  pay such  Property  Taxes  to  Landlord  on or  before  the  later of the
following dates: (1) ten (10) days prior to the delinquency  date; or (2) twenty
(20) days after  receipt of  billing.  If Tenant  fails to do so,  Tenant  shall
reimburse  Landlord,  on demand, for all interest,  late fees and penalties that
the  taxing  authority  charges  Landlord.  In the  event  Landlord's  mortgagee
requires  an impound  for  Property  Taxes,  then on the first day of each month
during the Lease Term,  Tenant  shall pay  Landlord  one  twelfth  (1/12) of its
annual share of such  Property  Taxes.  Tenant's  liability  hereunder  shall be
prorated to reflect the Commencement and termination dates of this Lease.
        



     For the purpose of this Lease,  "Property  Taxes"  means and  includes  all
taxes,  assessments  (including,  but not  limited  to,  assessments  for public
improvements  or benefits),  taxes based on vehicles  utilizing  parking  areas,
taxes based or measured by the rent paid,  payable or received under this Lease,
taxes on the value, use, or occupancy of the Premises,  the Buildings and/or the
Parcel,  Environmental  Surcharges,  and all other governmental  impositions and
charges of every kind and nature whatsoever,  whether or not customary or within
the contemplation of the parties hereto and regardless of whether the same shall
be extraordinary  or ordinary,  general or special,  unforeseen or foreseen,  or
similar or  dissimilar  to any of the  foregoing  which,  at any time during the
Lease Term, shall be applicable to the Premises, the Buildings and/or the Parcel
or  assessed,  levied or imposed upon the  Premises,  the  Buildings  and/or the
Parcel,  or become due and payable and a lien or charge upon the  Premises,  the
Buildings  and/or the  Parcel,  or any part  thereof,  under or by virtue of any
present or future laws, statutes, ordinances,  regulations or other requirements
of any governmental  authority whatsoever.  The term "Environmental  Surcharges"
shall mean and include any and all expenses, taxes, charges or penalties imposed
by the  Federal  Department  of Energy,  the  Federal  Environmental  Protection
Agency, the Federal Clean Air Act, or any regulations  promulgated thereunder or
any other local, state or federal governmental agency or entity now or hereafter
vested with the power to impose taxes, assessments, or other types of surcharges
as a means of  controlling  or  abating  environmental  pollution  or the use of
energy. The term "Property Taxes" shall not include any federal,  state or local
net income, estate, or inheritance tax imposed on Landlord.

     Tenant shall,  as Additional  Rent,  pay or reimburse  Landlord for any tax
based  upon,  allocable  to,  or  measured  by the area of the  Premises  or the
Buildings  or the Parcel;  or by the rent paid,  payable or received  under this
Lease;  any tax upon or with  respect  to the  possession,  leasing,  operation,
management, maintenance, alteration, repair, use or occupancy of the Premises or
any portion thereof; any privilege tax, excise tax, business and occupation tax,
gross receipts tax,  sales and/or use tax,  water tax, sewer tax,  employee tax,
occupational  license tax imposed  upon  Landlord or Tenant with  respect to the
Premises;  any tax upon this  transaction  or any  document to which Tenant is a
party creating or transferring an interest or an estate in the Premises.
       
      Insurance

     Tenant agrees to indemnify,  protect and defend  Landlord  against and hold
Landlord  harmless  from  any and  all  claims,  causes  of  action,  judgments,
obligations   or   liabilities,   and  all  reasonable   expenses   incurred  in
investigating or resisting the same (including  reasonable  attorneys' fees), on
account of, or arising out of, the operation,  maintenance,  use or occupancy of
the Premises  and the Parcel and all areas  appurtenant  thereto.  This Lease is
made on the express  understanding  that  Landlord  shall not be liable for, nor
suffer loss by reason of,  injury to person or  property,  from  whatever  cause
(except for the active negligence or willful  misconduct of Landlord),  which in
any way may be connected  with the  operation,  use or occupancy of the Premises
specifically  including,  without  limitation,  any  liability for injury to the
person or property of Tenant,  its agents,  officers,  employees,  licensees and
invitees.


     Tenant shall, at Tenant's expense, obtain and keep in force during the term
of this Lease a policy of  comprehensive  public  liability  insurance  insuring
Landlord and Tenant against claims and liabilities arising out of the operation,
use, or occupancy of the Premises and all areas appurtenant  thereto,  including
parking  areas.  Such  insurance  shall be in an amount  of not less than  Three
Million  Dollars  ($3,000,000.00)  for bodily injury or death as a result of any
one occurrence and Five Hundred  Thousand  Dollars  ($500,000.00)  for damage to
property  as a  result  of any  one  occurrence.  The  insurance  shall  be with
companies  approved by Landlord,  which approval Landlord agrees not to withhold
unreasonably.  Tenant shall  deliver to Landlord,  prior to  possession,  and at
least  thirty  (30) days  prior to the  expiration  thereof,  a  certificate  of
insurance  evidencing  the existence of the policy  required  hereunder and such
certificate  shall  certify that the policy (1) names  Landlord as an additional
insured,  (2) shall not be  canceled or altered  without  thirty (30) days prior
written notice to Landlord,  (3) insures  performance of the indemnity set forth
in  Subparagraph  8.A above,  (4) the  coverage is primary  and any  coverage by
Landlord is in excess thereto and (5) contains a cross-liability endorsement.

     Landlord  may  maintain  a policy  or  policies  of  comprehensive  general
liability  insurance  insuring  Landlord  (and such others as are  designated by
Landlord),  against  liability for personal  injury,  bodily  injury,  death and
damage to property occurring or resulting from an occurrence in, on or about the
Premises or the Common  Area,  with such limits of coverage as Landlord may from
time to time determine are reasonably necessary for its protection.  The cost of
any such  liability  insurance  maintained  by  Landlord  shall be a Common Area
Charge and Tenant shall pay, as Additional Rent, Tenant's Pro Rata Share of such
cost to Landlord as provided in Paragraph 12 below.

     Landlord  shall  obtain  and keep in force  during the term of this Lease a
policy or policies of insurance  covering loss or damage to the Premises and the
Buildings,  in the  amount  of the full  replacement  value  thereof,  providing
protection against those perils included within the classification of "all risk"
insurance, plus a policy of rental income insurance in the amount of one hundred
percent (100%) of twelve (12) months rent (including,  without limitation,  sums
payable as Additional  Rent),  plus, at Landlord's  option,  flood insurance and
earthquake  insurance,  and any other  coverages which Landlord may from time to
time elect to maintain or which may be required  from time to time by Landlord's
mortgagee. Tenant shall have no interest in nor any right to the proceeds of any
insurance procured by Landlord on the Premises. Tenant shall, within twenty (20)
days after receipt of billing,  pay to Landlord as Additional Rent, Tenant's Pro
Rata  Share of such  insurance  procured  and  maintained  by  Landlord.  Tenant
acknowledges that such insurance procured by Landlord shall contain a deductible
which  reduces  Tenant's  cost for such  insurance  and, in the event of loss or
damage,  Tenant shall be required to pay to Landlord  Tenant's Pro Rata Share of
the amount of such deductible.

     Tenant  acknowledges that the insurance to be maintained by Landlord on the
Premises  pursuant  to  Subparagraph  8.C above will not insure any of  Tenant's
property.  Accordingly,  Tenant, at Tenant's own expense, shall maintain in full
force and effect on all of its fixtures,  equipment,  leasehold improvements and
personal property in the Premises,  a policy of "All Risk" coverage insurance to
the extent of at least ninety  percent (90%) of their  insurable  value.  Tenant
hereby releases Landlord, and its partners,  officers,  agents,  employees,  and
servants, from any and all claims, demands,  losses, expenses or injuries to the
Premises or to the furnishings, fixtures, equipment, inventory or other personal
property of Tenant in, about, or upon the Premises,  which are caused by perils,
events or  happenings  where the same are covered by the  insurance  required by
this Lease or which are the subject of insurance  carried by Tenant and in force
at the time of such loss.
                
     Tenant and  Landlord  hereby  mutually  waive their  respective  rights for
recovery  against each other for any loss of or damage to the property of either
party,  to the extent  such loss or damage is insured  by any  insurance  policy
required to be  maintained  by this Lease or  otherwise  in force at the time of
such loss or  damage.  Each party  shall  obtain any  special  endorsements,  if
required by the  insurer,  whereby the insurer  waives its right of  subrogation
against the other party hereto.  The provisions of this Subparagraph E shall not
apply in those  instances  in which  waiver of  subrogation  would cause  either
party's insurance coverage to be voided or otherwise made uncollectible.


     Tenant  shall pay for all water,  gas,  light,  heat,  power,  electricity,
telephone,  trash pick-up,  sewer charges, and all other services supplied to or
consumed on the Premises, and all taxes and surcharges thereon. In addition, the
cost of any  utility  services  supplied  to the Common  Area or not  separately
metered to the  Premises  shall be a Common  Area  Charge  and Tenant  shall pay
Tenant's  Pro Rata Share of such costs to Landlord as provided in  Paragraph  12
below.
      
Repairs and Maintenance

     Subject to the provisions of Paragraph 16, Landlord shall keep and maintain
the  structural  elements,  exterior roof and exterior  walls of the Building in
good order and repair.  Landlord  shall not,  however,  be required to maintain,
repair or replace the interior  surface of exterior walls, nor shall Landlord be
required to  maintain,  repair or replace  the  windows,  doors or plate  glass.
Landlord shall have no obligation to make repairs under this Subparagraph  until
a reasonable  time after  receipt of written  notice from Tenant of the need for
such  repairs.  Tenant shall  reimburse  Landlord,  as Additional  Rent,  within
fifteen  (15) days after  receipt of billing,  for the cost of such  repairs and
maintenance which are the obligation of Landlord  hereunder  (including the cost
of repairs and maintenance of the roofing, roof membrane, skylights, gutters and
down spouts),  provided however,  that Tenant shall not be required to reimburse
Landlord for the cost of maintenance  and repairs of the structural  elements of
the  Building  unless  such  maintenance  or repair is  required  because of the
negligence  or  willful  misconduct  of  Tenant  or its  employees,  agents,  or
invitees.  As used herein, the term "structural  elements of the Building" shall
mean and be limited to the foundation,  footings, floor slab (but not flooring),
structural walls, and roof structure (but not roofing or roof membrane).

     Except as expressly  provided in Subparagraph 10.A above,  Tenant shall, at
its sole cost,  keep and  maintain the entire  Premises and every part  thereof,
including without limitation,  the windows, window frames, plate glass, glazing,
skylights,  truck doors, doors and all door hardware,  the walls and partitions,
and  the  electrical,   plumbing,   lighting,   heating,   ventilating  and  air
conditioning systems and equipment in good order, condition and repair. The term
"repair" shall include replacements, restorations and/or renewals when necessary
as well as  painting.  Tenant's  obligation  shall  extend  to all  alterations,
additions and improvements to the Premises,  and all fixtures and  appurtenances
therein and thereto.  Tenant shall,  at all times during the Lease Term, have in
effect a service  contract for the  maintenance of the heating,  ventilating and
air  conditioning  ("HVAC")  equipment  with  an  HVAC  repair  and  maintenance
contractor  approved by Landlord.  The HVAC service  contract  shall provide for
periodic  inspection  and  servicing at least once every three (3) months during
the term hereof,  and Tenant shall provide Landlord with a copy of such contract
and all periodic service reports.
        
     Should Tenant fail to make repairs required of Tenant  hereunder  forthwith
upon five (5) days notice  from  Landlord or should  Tenant fail  thereafter  to
diligently  complete the repairs,  Landlord,  in addition to all other  remedies
available hereunder or by law and without waiving any alternative remedies,  may
make the same, and in that event,  Tenant shall reimburse Landlord as Additional
Rent for the cost of such maintenance or repairs within five (5) days of written
demand by Landlord.


     Landlord shall have no maintenance or repair  obligations  whatsoever  with
respect to the Premises except as expressly  provided in  Subparagraph  10.A and
Paragraph 11 and 16. Tenant hereby expressly waives the provisions of Subsection
1 of Section 1932 and Sections 1941 and 1942 of the Civil Code of California and
all rights to make  repairs at the  expense of  Landlord  as provided in Section
1942 of said Civil Code. There shall be no allowance to Tenant for diminution of
rental  value,  and  no  liability  on  the  part  of  Landlord,  by  reason  of
inconvenience,  annoyance  or injury to business  arising from the making of, or
the  failure  to make,  any  repairs,  alterations,  decorations,  additions  or
improvements in or to any portion of the Premises or the Building or Common Area
(or any of the areas used in connection with the operation thereof,  or in or to
any fixtures,  appurtenances  or  equipment),  or by reason of the negligence of
Tenant or any other tenant or occupant of the Parcel. In no event shall Landlord
be responsible for any  consequential  damages arising or alleged to have arisen
from any of the foregoing matters.  Tenant hereby agrees that Landlord shall not
be liable for injury to Tenant's business or any loss of income therefrom or for
damage to the goods,  wares,  merchandise or other property of Tenant,  Tenant's
employees,  invitees,  customers,  or any other person in or about the Premises,
the Building,  or the Common Area, nor,  except in the case of Landlord's  gross
negligence  or wilful  misconduct,  shall  Landlord  be liable for injury to the
person of Tenant, Tenant's employees,  agents or contractors whether such damage
or injury is caused by or results from fire, steam,  electricity,  gas, water or
rain,  or from the  breakage,  leakage,  obstruction  or other defects of pipes,
sprinklers, wires, appliances,  plumbing, air conditioning or lighting fixtures,
or from any  other  cause,  whether  the said  damage  or  injury  results  from
conditions arising upon the Premises or upon other portions of the Building,  or
from other sources or places and  regardless of whether the cause of such damage
or injury or the means of repairing the same is inaccessible to Tenant. Landlord
shall not be liable for any damages arising from any act or neglect of any other
tenant, if any, of the Building or the Parcel.

     Subject  to the  terms and  conditions  of this  Lease  and such  rules and
regulations  as Landlord  may from time to time  prescribe,  Tenant and Tenant's
employees,  invitees and customers  shall, in common with other occupants of the
Parcel,  and their  respective  employees,  invitees and  customers,  and others
entitled  to the use  thereof,  have the  non-exclusive  right to use the access
roads,  parking areas and facilities provided and designated by Landlord for the
general use and  convenience  of the  occupants  of the Parcel,  which areas and
facilities are referred to herein as "Common  Area." This right shall  terminate
upon the  termination  of this Lease.  Landlord  reserves the right from time to
time to make  changes in the  shape,  size,  location,  amount and extent of the
Common Area.  Landlord  further reserves the right to promulgate such reasonable
rules and  regulations  relating to the use of the Common Area,  and any part or
parts  thereof,  as Landlord may deem  appropriate  for the best interest of the
occupants of the Parcel.  The rules and regulations shall be binding upon Tenant
upon  delivery of a copy of them to Tenant,  and Tenant  shall abide by them and
cooperate  in their  observance.  Such rules and  regulations  may be amended by
Landlord from time to time, with or without  advance notice,  and all amendments
shall be effective upon delivery of a copy of them to Tenant.  Tenant shall have
the  non-exclusive  use of no more than forty (40) of the parking  spaces in the
Common Area as designated from time to time by Landlord. Tenant shall not at any
time park or permit the parking of  Tenant's  trucks or other  vehicles,  or the
trucks or other vehicles of others, adjacent to loading areas so as to interfere
in any way with the use of such  areas,  nor  shall  Tenant  at any time park or
permit the parking of Tenant's  vehicles or trucks, or the vehicles or trucks of
Tenant's  suppliers or others,  in any portion of the Common Area not designated
by Landlord  for such use by Tenant.  Tenant  shall not abandon any  inoperative
vehicles or equipment  on any portion of the Common  Area.  Tenant shall make no
alterations, improvements or additions to the Common Area.
        
     Landlord shall operate, manage, insure, maintain and repair the Common Area
in good  order,  condition  and repair  similar to the manner the Common Area is
currently  being  maintained.  The  manner in which  the  Common  Area  shall be
maintained and the expenditures for such maintenance  shall be at the discretion
of Landlord.  The cost of such repair,  maintenance,  operation,  insurance  and
management, including without limitation, maintenance and repair of landscaping,
irrigation systems, paving,  sidewalks,  fences, and lighting, shall be a Common
Area  Charge and Tenant  shall pay to Landlord  Tenant's  Pro Rata Share of such
costs as provided in Paragraph 12 below.
     
Tenant shall pay to Landlord,  as Additional Rent, upon demand but not more
often than once each calendar  month, an amount equal to Tenant's Pro Rata Share
of the Common Area Charges as defined in Subparagraph  8.B and Paragraphs 9, 11,
13 and 36 of this  Lease.  Tenant  acknowledges  and agrees that the Common Area
Charges shall include an additional five percent (5%) of the actual expenditures
in order to  compensate  Landlord  for  accounting,  management  and  processing
services.


     Tenant shall not make, or suffer to be made, any alterations,  improvements
or additions in, on, about or to the Premises or any part  thereof,  without the
prior written  consent of Landlord and without a valid building permit issued by
the appropriate  governmental  authority. As a condition to giving such consent,
Landlord  may  require  that  Tenant  agree  to  remove  any  such  alterations,
improvements or additions at the  termination of this Lease,  and to restore the
Premises to their prior condition.  Unless Landlord  requires that Tenant remove
any such  alteration,  improvement  or  addition,  any  alteration,  addition or
improvement  to the Premises,  except  movable  furniture and trade fixtures not
affixed to the Premises,  shall become the property of Landlord upon termination
of the Lease and shall remain upon and be  surrendered  with the Premises at the
termination of this Lease. Without limiting the generality of the foregoing, all
heating,  lighting,  electrical (including all wiring, conduit,  outlets, drops,
buss ducts, main and subpanels),  air conditioning,  partitioning,  drapery, and
carpet  installations  made by Tenant regardless of how affixed to the Premises,
together with all other additions, alterations and improvements that have become
an  integral  part of the  Building,  shall be and  become the  property  of the
Landlord upon  termination of the Lease, and shall not be deemed trade fixtures,
and shall remain upon and be surrendered with the Premises at the termination of
this Lease.

     If, during the Term hereof, any alteration,  addition or change of any sort
to all or any portion of the Premises is required by law, regulation,  ordinance
or order of any public  agency,  Tenant shall promptly make the same at its sole
cost and expense. If during the Lease Term, any alteration,  addition, or change
to the Common  Area is required by law,  regulation,  ordinance  or order of any
public  agency,  Landlord  shall make the same and the cost of such  alteration,
addition or change  shall be a Common Area Charge and Tenant  shall pay Tenant's
Pro Rata Share of said cost to Landlord as provided in Paragraph 12 above.

     By entry and taking  possession  of the  Premises  pursuant  to this Lease,
Tenant accepts the Premises as being in good and sanitary  order,  condition and
repair and accepts the  Premises in their  condition  existing as of the date of
such entry, and Tenant further accepts the tenant improvements to be constructed
by  Landlord,  if any,  as being  completed  in  accordance  with the  plans and
specifications  for such  improvements,  except  for punch  list  items.  Tenant
acknowledges   that  neither  Landlord  nor  Landlord's   agents  has  made  any
representation  or warranty as to the suitability of the Premises to the conduct
of  Tenant's  business.  Any  agreements,   warranties  or  representations  not
expressly  contained herein shall in no way bind either Landlord or Tenant,  and
Landlord  and Tenant  expressly  waive all  claims for  damages by reason of any
statement, representation, warranty, promise or agreement, if any, not contained
in this  Lease.  This Lease  constitutes  the entire  understanding  between the
parties hereto and no addition to, or modification  of, any term or provision of
this  Lease  shall be  effective  until set  forth in a  writing  signed by both
Landlord and Tenant.

        Default

     A breach of this Lease by Tenant shall exist if any of the following events
(hereinafter referred to as "Event of Default") shall occur:
     (1) Default in the  payment  when due of any  installment  of rent or other
payment  required to be made by Tenant  hereunder,  where such default shall not
have been cured  within three (3) days after  written  notice of such default is
given to Tenant. If Landlord serves Tenant with a Notice to Pay or Quit pursuant
to the applicable  unlawful detainer statutes,  such Notice to Pay or Quit shall
also constitute the written notice required by this clause;
     (2) Tenant's  breach or violation of any of the  provisions of Paragraph 25
below;


     (3) Tenant's  breach or violation of any of the  provisions of Paragraph 39
below;
     (4)  Tenant's  failure to perform  any other term,  covenant  or  condition
contained in this Lease where such  failure  shall have  continued  for ten (10)
days after written notice of such failure is given to Tenant;

     (5) Tenant's vacating or abandonment of the Premises;
     (6) Tenant's assignment of its assets for the benefit of its creditors;

     (7) The  sequestration  of, attachment of, or execution on, any substantial
part of the  property of Tenant or on any  property  essential to the conduct of
Tenant's business,  shall have occurred and Tenant shall have failed to obtain a
return or release of such property within thirty (30) days thereafter,  or prior
to sale  pursuant  to such  sequestration,  attachment  or  levy,  whichever  is
earlier;
     (8)  Tenant  or any  guarantor  of  Tenant's  obligations  hereunder  shall
commence  any  case,   proceeding  or  other  action   seeking   reorganization,
arrangement,  adjustment,  liquidation,  dissolution or composition of it or its
debts under any law relating to bankruptcy, insolvency, reorganization or relief
of debtors,  or seek  appointment of a receiver,  trustee,  custodian,  or other
similar official for it or for all or any substantial part of its property;
     (9)  Tenant  or any such  guarantor  shall  take any  corporate  action  to
authorize any of the actions set forth in Clause 8 above; or
     (10) Any case,  proceeding or other action  against Tenant or any guarantor
of Tenant's  obligations  hereunder shall be commenced  seeking to have an order
for relief entered against it as debtor, or seeking reorganization, arrangement,
adjustment, liquidation, dissolution or composition of it or its debts under any
law relating to bankruptcy, insolvency,  reorganization or relief of debtors, or
seeking appointment of a receiver,  trustee, custodian or other similar official
for it or for  all or any  substantial  part of its  property,  and  such  case,
proceeding  or other  action  (i)  results  in the entry of an order for  relief
against it which is not fully stayed  within  seven (7) business  days after the
entry thereof or (ii) remains undismissed for a period of forty-five (45) days.

     Upon any Event of Default,  Landlord shall have the following remedies,  in
addition to all other rights and remedies provided by law, to which Landlord may
resort cumulatively, or in the alternative:
     (1) Recovery of Rent. Landlord shall be entitled to keep this Lease in full
force and effect  (whether or not Tenant shall have  abandoned the Premises) and
to enforce all of its rights and remedies under this Lease,  including the right
to  recover  rent and  other  sums as they  become  due,  plus  interest  at the
Permitted  Rate (as  defined in  Paragraph  33 below)  from the due date of each
installment of rent or other sum until paid.


     (2) Termination. Landlord may terminate this Lease by giving Tenant written
notice of termination. On the giving of the notice all of Tenant's rights in the
Premises and the Building  and Parcel  shall  terminate.  Upon the giving of the
notice of  termination,  Tenant shall  surrender  and vacate the Premises in the
condition  required  by  Paragraph  34,  and  Landlord  may  re-enter  and  take
possession  of the Premises and all the remaining  improvements  or property and
eject Tenant or any of Tenant's subtenants, assignees or other person or persons
claiming any right under or through Tenant or eject some and not others or eject
none. This Lease may also be terminated by a judgment specifically providing for
termination.  Any termination under this paragraph shall not release Tenant from
the  payment of any sum then due  Landlord or from any claim for damages or rent
previously accrued or then accruing against Tenant. In no event shall any one or
more of the  following  actions by Landlord  constitute  a  termination  of this
Lease:
     (a) maintenance and preservation of the Premises;

     (b) efforts to relet the Premises;

     (c)  appointment  of a  receiver  in order to protect  Landlord's  interest
hereunder;
     (d) consent to any  subletting  of the Premises or assignment of this Lease
by Tenant,  whether  pursuant to provisions  hereof  concerning  subletting  and
assignment or otherwise; or
     (e) any other action by Landlord or Landlord's  agents intended to mitigate
the adverse effects from any breach of this Lease by Tenant.
     (3) Damages. In the event this Lease is terminated pursuant to Subparagraph
15.B.2  above,  or  otherwise,  Landlord  shall be  entitled  to  damages in the
following sums:
     (a) the worth at the time of award of the unpaid rent which has been earned
at the time of termination; plus
     (b) the worth at the time of award of the amount by which the  unpaid  rent
which would have been earned after  termination  until the time of award exceeds
the amount of such  rental loss that Tenant  proves  could have been  reasonably
avoided; plus

     (c) the worth at the time of award of the amount by which the  unpaid  rent
for the  balance of the term after the time of award  exceeds the amount of such
rental loss that Tenant proves could be reasonably avoided; and
     (d) any other amount  necessary to  compensate  Landlord for all  detriment
proximately  caused by Tenant's  failure to perform Tenant's  obligations  under
this Lease,  or which in the ordinary course of things would be likely to result
therefrom  including,  without  limitation,  the  following:  (i)  expenses  for
cleaning,  repairing or restoring  the  Premises;  (ii)  expenses for  altering,
remodeling  or otherwise  improving  the Premises for the purpose of  reletting,
including  installation of leasehold  improvements (whether such installation be
funded by a reduction of rent,  direct  payment or  allowance to the  succeeding
lessee,  or otherwise);  (iii) real estate broker's fees,  advertising costs and
other  expenses of reletting the  Premises;  (iv) costs of carrying the Premises
such  as  taxes  and  insurance   premiums   thereon,   utilities  and  security
precautions;   (v)expenses  in  retaking  possession  of  the  Premises;   (vi)
attorneys' fees and court costs; and (vii) any unamortized real estate brokerage
commission paid in connection with this Lease.
     (e) The  "worth  at the  time  of  award"  of the  amounts  referred  to in
Subparagraphs  (a) and (b) of this  Paragraph  15.B(3) is  computed  by allowing
interest at the Permitted  Rate. The "worth at the time of award" of the amounts
referred  to in  Subparagraph  (c) of this  Paragraph  15.B(3)  is  computed  by
discounting such amount at the discount rate of the Federal Reserve Board of San
Francisco at the time of award plus one percent (1%). The term "rent" as used in
this  Paragraph  15 shall  include  all sums  required  to be paid by  Tenant to
Landlord pursuant to the terms of this Lease.

     In the event that any portion of the Premises  are  destroyed or damaged by
an uninsured  peril,  Landlord or Tenant may, upon written  notice to the other,
given  within  thirty  (30)  days  after  the   occurrence  of  such  damage  or
destruction, elect to terminate this Lease; provided, however, that either party
may,  within  thirty (30) days after  receipt of such notice,  elect to make any
required  repairs and/or  restoration at such party's sole cost and expense,  in
which  event this Lease  shall  remain in full force and  effect,  and the party
having  made such  election  to restore or repair  shall  thereafter  diligently
proceed with such repairs and/or restoration.
        
     In the event the Premises are damaged or destroyed  from any insured  peril
to the extent of fifty percent (50%) or more of the then replacement cost of the
Premises,  Landlord may, upon written notice to Tenant, given within thirty (30)
days after the occurrence of such damage or destruction, elect to terminate this
Lease.  If  Landlord  does not give such notice in writing  within such  period,
Landlord shall be deemed to have elected to rebuild or restore the Premises,  in
which event  Landlord  shall,  at its expense,  promptly  rebuild or restore the
Premises to their  condition prior to the damage or destruction and Tenant shall
pay to Landlord upon commencement of reconstruction the amount of any deductible
from the insurance policy.
        
     In the event the Premises are damaged or destroyed  from any insured  peril
to the extent of less than fifty percent (50%) of the then  replacement  cost of
the Premises, Landlord shall, at Landlord's expense, promptly rebuild or restore
the Premises to their  condition  prior to the damage or destruction  and Tenant
shall pay to Landlord  upon  commencement  of  reconstruction  the amount of any
deductible from the insurance policy.
        
     In the event that,  pursuant to the  foregoing  provisions,  Landlord is to
rebuild or restore the Premises,  Landlord shall,  within thirty (30) days after
the occurrence of such damage or destruction, provide Tenant with written notice
of the time  required for such repair or  restoration.  If such period is longer
than two hundred  seventy  (270) days from the  issuance  of a building  permit,
Tenant may, within thirty (30) days after receipt of Landlord's notice, elect to
terminate  the Lease by giving  written  notice to  Landlord  of such  election,
whereupon the Lease shall immediately terminate. The period of time for Landlord
to complete the repair or restoration shall be extended for delays caused by the
fault or neglect of Tenant or because of acts of God,  acts of public  agencies,
labor disputes,  strikes,  fires,  freight  embargoes,  rainy or stormy weather,
inability  to obtain  materials,  supplies  or  fuels,  acts of  contractors  or
subcontractors, or delay of contractors or subcontractors due to such causes, or
other  contingencies  beyond the control of Landlord.  Landlord's  obligation to
repair or restore the Premises  shall not include  restoration of Tenant's trade
fixtures, equipment, merchandise, or any improvements,  alterations or additions
made by Tenant to the Premises.
        
     Unless this Lease is terminated pursuant to the foregoing provisions,  this
Lease shall remain in full force and effect; provided,  however, that during any
period of  repairs  or  restoration,  rent and all other  amounts  to be paid by
Tenant on account of the Premises  and this Lease shall be abated in  proportion
to the area of the Premises rendered not reasonably  suitable for the conduct of
Tenant's  business  thereon.  Tenant hereby  expressly  waives the provisions of
Section 1932,  Subdivision 2 and Section 1933,  Subdivision 4 of the  California
Civil Code.
        
  Condemnation



     For the purposes of this Lease, the term (1) "Taking" means a taking of the
Premises  or damage to the  Premises  related  to the  exercise  of the power of
eminent  domain  and  includes  a  voluntary   conveyance,   in  lieu  of  court
proceedings,  to any agency,  authority,  public  utility,  person or  corporate
entity empowered to condemn property; (2) "Total Taking" means the taking of the
entire Premises or so much of the Premises as to prevent or substantially impair
the use thereof by Tenant for the uses herein specified;  provided,  however, in
no event shall a Taking of less than ten percent (10%) of the Premises be deemed
a Total Taking;  (3) "Partial  Taking" means the taking of only a portion of the
Premises  which does not  constitute a Total Taking;  (4) "Date of Taking" means
the date upon which the title to the Premises,  or a portion thereof,  passes to
and vests in the condemnor or the effective  date of any order for possession if
issued prior to the date title vests in the condemnor; and (5) "Award" means the
amount of any award made,  consideration paid, or damages ordered as a result of
a Taking.
     The parties agree that in the event of a Taking all rights  between them or
in and to an Award shall be as set forth  herein and Tenant  shall have no right
to any Award except as set forth herein.
                
     In the event of a Total  Taking  during  the term  hereof (1) the rights of
Tenant under the Lease and the leasehold estate of Tenant in and to the Premises
shall cease and terminate as of the Date of Taking; (2) Landlord shall refund to
Tenant any prepaid  rent;  (3) Tenant shall pay Landlord any rent or charges due
Landlord  under the Lease,  each  prorated as of the Date of Taking;  (4) Tenant
shall receive from Landlord  those portions of the Award  attributable  to trade
fixtures of Tenant and for moving  expenses of Tenant;  and (5) the remainder of
the Award shall be paid to and be the property of Landlord.
                
     In the event of a Partial  Taking  during the term hereof (1) the rights of
Tenant under the Lease and the leasehold  estate of Tenant in and to the portion
of the Premises  taken shall cease and  terminate as of the Date of Taking;  (2)
from and after the Date of Taking the  Monthly  Installment  of rent shall be an
amount equal to the product  obtained by multiplying the Monthly  Installment of
rent  immediately  prior to the Taking by a fraction,  the numerator of which is
the number of square feet  contained  in the  Premises  after the Taking and the
denominator  of which is the number of square  feet  contained  in the  Premises
prior to the Taking; (3) Tenant shall receive from the Award the portions of the
Award  attributable  to trade  fixtures of Tenant;  and (4) the remainder of the
Award shall be paid to and be the property of Landlord.

     Tenant shall (A) pay for all labor and services  performed  for,  materials
used by or  furnished  to,  Tenant or any  contractor  employed  by Tenant  with
respect to the Premises;  (B) indemnify,  defend,  protect and hold Landlord and
the Premises  harmless and free from any liens,  claims,  liabilities,  demands,
encumbrances,  or  judgments  created  or  suffered  by  reason  of any labor or
services  performed  for,  materials  used by or  furnished  to,  Tenant  or any
contractor  employed by Tenant with respect to the Premises;  (C) give notice to
Landlord in writing five (5) days prior to employing  any laborer or  contractor
to  perform  services  related  to,  or  receiving  materials  for use  upon the
Premises;  and (D)  permit  Landlord  to post a notice of  nonresponsibility  in
accordance with the statutory requirements of California Civil Code Section 3094
or any amendment thereof. In the event Tenant is required to post an improvement
bond with a public agency in connection with the above, Tenant agrees to include
Landlord as an additional obligee.
        
     Tenant  shall  permit  Landlord and its agents to enter the Premises at any
reasonable  time for the purpose of inspecting the same,  performing  Landlord's
maintenance and repair responsibilities,  posting a notice of non-responsibility
for alterations,  additions or repairs and at any time within one hundred eighty
(180) days  prior to  expiration  of this  Lease,  to place  upon the  Premises,
ordinary "For Lease" or "For Sale" signs.

        
     Tenant shall, at its own cost,  comply with all of the  requirements of all
municipal,  county,  state and federal  authorities  now in force,  or which may
hereafter be in force,  pertaining to the use and occupancy of the Premises, and
shall faithfully observe all municipal,  county, state and federal law, statutes
or ordinances  now in force or which may hereafter be in force.  The judgment of
any court of competent  jurisdiction or the admission of Tenant in any action or
proceeding  against  Tenant,  whether  Landlord be a party  thereto or not, that
Tenant has  violated any such  ordinance or statute in the use and  occupancy of
the Premises  shall be conclusive of the fact that such  violation by Tenant has
occurred.

     The following provisions shall govern the relationship of this Lease to any
underlying  lease,  mortgage or deed of trust which now or hereafter affects the
Premises,  the  Building  and/or the Parcel,  or  Landlord's  interest or estate
therein  (the   "Project")   and  any  renewal,   modification,   consolidation,
replacement, or extension thereof (a "Security Instrument").

     This Lease is subject and subordinate to all Security  Instruments existing
as of the  Commencement  Date.  However,  if any Lender so requires,  this Lease
shall become prior and superior to any such Security Instrument.

     At Landlord's election,  this Lease shall become subject and subordinate to
any Security  Instrument  created after the Commencement  Date.  Notwithstanding
such subordination, Tenant's right to quiet possession of the Premises shall not
be  disturbed  so long as  Tenant  is not in  default  and  performs  all of its
obligations under this Lease, unless this Lease is otherwise terminated pursuant
to its terms.

     Tenant shall  execute any  reasonable  document or  instrument  required by
Landlord  or any  Lender to make this Lease  either  prior or  subordinate  to a
Security  Instrument,  which  may  include  such  other  matters  as the  Lender
customarily  requires in connection with such agreements,  including  provisions
that the Lender,  if it succeeds to the  interest of Landlord  under this Lease,
shall not be (i) liable for any act or omission of any prior landlord (including
Landlord), (ii) subject to any offsets or defenses which Tenant may have against
any prior landlord (including  Landlord),  (iii) bound by any rent or Additional
Rent paid more than one (1) month in  advance  of its date due under  this Lease
unless the Lender receives it from Landlord, (iv) liable for any defaults on the
part of Landlord occurring prior to the time that the Lender takes possession of
the Premises in connection with the enforcement of its Security Instrument,  (v)
liable for the return of any  Security  Deposit  unless  such  deposit  has been
delivered to Lender, or (vi) bound by any agreement or modification of the Lease
made without the prior written  consent of Lender.  Tenant's  failure to execute
any such document or instrument with ten (10) days after written demand therefor
shall constitute a default by Tenant.

     Tenant shall attorn (1) to any purchaser of the Premises at any foreclosure
sale or private sale conducted pursuant to any Security  Instrument  encumbering
the Project;  (2) to any grantee or  transferee  designated in any deed given in
lieu of  foreclosure;  or (3) to the lessor  under any  underlying  ground lease
should such ground lease be terminated.
                
     As used in this Lease,  the term "Lender"  shall mean (1) any  beneficiary,
mortgagee,  secured party,  or other holder of any deed of trust,  mortgage,  or
other written  security device or agreement  affecting the Project;  and (2) any
lessor under any underlying lease under which Landlord holds its interest in the
Project.
        
     This Lease shall terminate  without further notice at the expiration of the
Lease Term. Any holding over by Tenant after  expiration  shall not constitute a
renewal or extension  or give Tenant any rights in or to the Premises  except as
expressly provided in this Lease. Any holding over after the expiration with the
consent of Landlord  shall be construed to be a tenancy from month to month,  at
one hundred fifty  percent  (150%) of the monthly rent for the last month of the
Lease Term, and shall otherwise be on the terms and conditions  herein specified
insofar as applicable.

        
     Any notice  required  or desired to be given  under this Lease  shall be in
writing with copies directed as indicated  below and shall be personally  served
or given by mail.  Any  notice  given by mail shall be deemed to have been given
when forty-eight (48) hours have elapsed from the time such notice was deposited
in the United States  mails,  certified  and postage  prepaid,  addressed to the
party to be served with a copy as indicated  herein at the last address given by
that party to the other party under the  provisions of this Paragraph 23. At the
date of execution of this Lease, the address of Landlord is:
                                  
                                   511 Division Street
                                   Campbell, CA 95008

and the address of Tenant is:

                                  Building 3, Suite 200
                                  6300 Bridgepoint Parkway
                                  Austin, TX   78730
                                  Attn: Keith D. Thatcher, CFO

     In the event  either party shall bring any action or legal  proceeding  for
damages for any alleged  breach of any provision of this Lease,  to recover rent
or possession of the Premises,  to terminate this Lease, or to enforce,  protect
or  establish  any term or  covenant  of this Lease or right or remedy of either
party,  the  prevailing  party  shall be  entitled  to recover as a part of such
action or  proceeding,  reasonable  attorneys'  fees and court costs,  including
attorneys' fees and costs for appeal,  as may be fixed by the court or jury. The
term  "prevailing  party"  shall mean the party who received  substantially  the
relief requested, whether by settlement,  dismissal, summary judgment, judgment,
or otherwise.

        Nonassignment

     Tenant's  interest in this Lease is not assignable,  by operation of law or
otherwise, nor shall Tenant have the right to sublet the Premises,  transfer any
interest of Tenant  therein or permit any use of the Premises by another  party,
without the prior written  consent of Landlord to such  assignment,  subletting,
transfer or use,  which  consent  Landlord  agrees not to withhold  unreasonably
subject  to  the  provisions  of  Subparagraph  25.B  below.  A  consent  to one
assignment, subletting, occupancy or use by another party shall not be deemed to
be a consent  to any  subsequent  assignment,  subletting,  occupancy  or use by
another party.  Any assignment or subletting  without such consent shall be void
and shall, at the option of Landlord, terminate this Lease.
        
     Landlord's  waiver or consent to any  assignment  or  subletting  hereunder
shall not relieve Tenant from any obligation under this Lease unless the consent
shall so provide.


     If Tenant  desires  to assign  its  interest  in this  Lease or sublet  the
Premises,  or transfer any interest of Tenant therein,  or permit the use of the
Premises  by  another  party   (hereinafter   collectively   referred  to  as  a
"Transfer"),  Tenant shall give Landlord at least thirty (30) days prior written
notice of the  proposed  Transfer  and of the terms of such  proposed  Transfer,
including,  but not limited to, the name and legal  composition  of the proposed
transferee, a financial statement of the proposed transferee,  the nature of the
proposed transferee's business to be carried on in the Premises,  the payment to
be made or other consideration to be given to Tenant on account of the Transfer,
and such other  pertinent  information  as may be requested by Landlord,  all in
sufficient  detail to enable Landlord to evaluate the proposed  Transfer and the
prospective  transferee.  It is the intent of the parties hereto that this Lease
shall confer upon Tenant only the right to use and occupy the  Premises,  and to
exercise  such other  rights as are  conferred  upon Tenant by this  Lease.  The
parties agree that this Lease is not intended to have a bonus value nor to serve
as a vehicle whereby Tenant may profit by a future Transfer of this Lease or the
right to use or occupy the Premises as a result of any favorable terms contained
herein,  or future  changes in the market for leased space.  It is the intent of
the parties that any such bonus value that may attach to this Lease shall be and
remain the  exclusive  property of  Landlord.  Accordingly,  in the event Tenant
seeks to Transfer its  interest in this Lease or the  Premises,  Landlord  shall
have the following  options,  which may be exercised at its sole choice  without
limiting  Landlord in the exercise of any other right or remedy  which  Landlord
may have by reason of such proposed Transfer:
                         
     (1) Landlord may elect to terminate this Lease effective as of the proposed
effective  date of the  proposed  Transfer  and release  Tenant from any further
liability  hereunder  accruing  after  such  termination  date by giving  Tenant
written  notice of such  termination  within  twenty (20) days after  receipt by
Landlord of Tenant's notice of intent to transfer as provided above. If Landlord
makes such  election  to  terminate  this  Lease,  Tenant  shall  surrender  the
Premises,   in  accordance  with  Paragraph  34,  on  or  before  the  effective
termination date; or

     (2)  Landlord may consent to the proposed  Transfer on the  condition  that
Tenant agrees to pay to Landlord, as Additional Rent, forty percent (40%) of the
positive   difference,   if  any,  between  (i)  any  and  all  rents  or  other
consideration  (including  key money)  received by Tenant from the transferee by
reason  of such  Transfer  less  (ii) the sum of the rent  payable  by Tenant to
Landlord under this Lease and any brokerage  commissions or advertising expenses
incurred by Tenant in connection with the Transfer. Tenant expressly agrees that
the foregoing is a reasonable  condition for obtaining Landlord's consent to any
Transfer; or

     (3) Landlord may reasonably withhold its consent to the proposed Transfer.

     The  covenants and  agreements  contained in this Lease shall be binding on
the parties hereto and on their respective heirs, successors and assigns (to the
extent the Lease is assignable).
        
     In the  event of any  default  on the part of  Landlord,  Tenant  will give
notice by registered or certified mail to any  beneficiary of a deed of trust or
mortgagee of a mortgage encumbering the Premises,  whose address shall have been
furnished to Tenant,  and shall offer such beneficiary or mortgagee a reasonable
opportunity  to cure the default,  including  time to obtain  possession  of the
Premises  by  power  of sale or  judicial  foreclosure,  if  such  should  prove
necessary to effect a cure.

     Tenant  agrees  promptly  following  request by Landlord to (A) execute and
deliver to Landlord any documents,  including estoppel certificates presented to
Tenant by Landlord,  (1)  certifying  that this Lease is unmodified  and in full
force and effect (or, if modified,  specifying such  modification and certifying
that the Lease as so modified is in full force and effect) and the date to which
the rent and other  charges are paid in advance,  if any, and (2)  acknowledging
that there are not, to Tenant's  knowledge,  any uncured defaults on the part of
Landlord hereunder (or specifying such defaults, if any, that are claimed),  and
(3)  evidencing  the status of the Lease as may be  required  either by a lender
making a loan to Landlord to be secured by a deed of trust or mortgage  covering
the Premises or a purchaser of the Premises  from Landlord and (B) to deliver to
Landlord the financial statement of Tenant with an opinion of a certified public
accountant,  including a balance  sheet and profit and loss  statement,  for the
last completed  fiscal year all prepared in accordance  with generally  accepted
accounting  principles  consistently  applied.  Tenant's  failure  to deliver an
estoppel  certificate  promptly  following  such  request  shall  be an Event of
Default under this Lease.

     The  voluntary  or other  surrender  of this Lease by  Tenant,  or a mutual
cancellation  thereof,  shall  not work a merger  and  shall,  at the  option of
Landlord,  terminate all or any existing subleases or subtenants,  or operate as
an assignment to Landlord of any or all such subleases or subtenants.
        
     The waiver by  Landlord  or Tenant of any breach of any term,  covenant  or
condition  herein  contained  shall not be  deemed to be a waiver of such  term,
covenant or  condition or any  subsequent  breach of the same or any other term,
covenant or condition herein contained.
        
      General

     The captions and paragraph headings used in this Lease are for the purposes
of convenience  only. They shall not be construed to limit or extend the meaning
of any  part of this  Lease,  or be used to  interpret  specific  sections.  The
word(s)  enclosed in quotation  marks shall be  construed  as defined  terms for
purposes  of this Lease.  As used in this Lease,  the  masculine,  feminine  and
neuter and the  singular  or plural  number  shall each be deemed to include the
other whenever the context so requires.
                
     The  term  Landlord  as used  in this  Lease,  so far as the  covenants  or
obligations on the part of Landlord are concerned,  shall be limited to mean and
include only the owner at the time in question of the fee title of the Premises,
and in the event of any  transfer  or  transfers  of the title of such fee,  the
Landlord  herein named (and in case of any subsequent  transfers or conveyances,
the then  grantor)  shall  after  the date of such  transfer  or  conveyance  be
automatically freed and relieved of all liability with respect to performance of
any covenants or  obligations  on the part of Landlord  contained in this Lease,
thereafter to be performed;  provided that any funds in the hands of Landlord or
the then grantor at the time of such transfer,  in which Tenant has an interest,
shall be turned over to the  grantee.  It is  intended  that the  covenants  and
obligations  contained in this Lease on the part of Landlord  shall,  subject as
aforesaid,  be binding upon each Landlord, its heirs, personal  representatives,
successors and assigns only during its respective period of ownership.
                
     Time is of the  essence  for the  performance  of each term,  covenant  and
condition of this Lease.
               
     In case any one or more of the provisions contained herein,  except for the
payment  of  rent,  shall  for any  reason  be held to be  invalid,  illegal  or
unenforceable in any respect,  such invalidity,  illegality or  unenforceability
shall not affect any other  provision  of this  Lease,  but this Lease  shall be
construed as if such invalid,  illegal or  unenforceable  provision had not been
contained herein.  This Lease shall be construed and enforced in accordance with
the laws of the State of California.

     If Tenant is more than one  person or  entity,  each such  person or entity
shall be jointly and severally liable for the obligations of Tenant hereunder.

     As used in this  Lease,  the  term  "Law(s)"  or  "law(s)"  shall  mean any
judicial decision, statute,  constitution,  ordinance,  resolution,  regulation,
rule,  administrative  order, or other  requirement of any government  agency or
authority having  jurisdiction over the parties to this Lease or the Premises or
both,  in effect at the  Commencement  Date of this Lease or any time during the
Lease Term, including,  without limitation, any regulation,  order, or policy of
any quasi-official entity or body (e.g., board of fire examiners, public utility
or special district).


     As used in this Lease,  the term "Agent" shall mean, with respect to either
Landlord or Tenant,  its respective  agents,  employees,  contractors (and their
subcontractors), and invitees (and in the case of Tenant, its subtenants).
            
  WAIVER OF JURY TRIAL

LANDLORD AND TENANT HEREBY WAIVE THEIR  RESPECTIVE RIGHT TO TRIAL BY JURY OF ANY
CAUSE  OF  ACTION,  CLAIM,   COUNTERCLAIM  OR  CROSS-COMPLAINT  IN  ANY  ACTION,
PROCEEDING  AND/OR HEARING BROUGHT BY EITHER  LANDLORD  AGAINST TENANT OR TENANT
AGAINST  LANDLORD  ON ANY  MATTER  WHATSOEVER  ARISING  OUT  OF,  OR IN ANY  WAY
CONNECTED WITH, THIS LEASE,  THE  RELATIONSHIP OF LANDLORD AND TENANT,  TENANT'S
USE OR  OCCUPANCY  OF THE  PREMISES,  OR ANY CLAIM OF INJURY OR  DAMAGE,  OR THE
ENFORCEMENT OF ANY REMEDY UNDER ANY LAW,  STATUTE,  OR REGULATION,  EMERGENCY OR
OTHERWISE, NOW OR HEREAFTER IN EFFECT.

   INITIALS:                   ______ (Landlord)                 ______ (Tenant)

     Tenant shall not place or permit to be placed any sign or decoration on the
Parcel or the  exterior of the  Building  without the prior  written  consent of
Landlord.  Tenant, upon written notice by Landlord, shall immediately remove any
sign or  decoration  that  Tenant  has placed or  permitted  to be placed on the
Parcel or the  exterior of the  Building  without the prior  written  consent of
Landlord,  and if Tenant fails to so remove such sign or decoration  within five
(5) days after Landlord's  written notice,  Landlord may enter upon the Premises
and  remove  said sign or  decoration  and  Tenant  agrees to pay  Landlord,  as
Additional  Rent upon demand,  the cost of such removal.  At the  termination of
this Lease,  Tenant  shall  remove any sign which it has placed on the Parcel or
Building and shall repair any damage  caused by the  installation  or removal of
such sign.
        
     Any Monthly Installment of rent or any other sum due from Tenant under this
Lease which is  received  by Landlord  after the date the same is due shall bear
interest  from said due date until paid,  at an annual rate equal to the greater
of (the "Permitted  Rate"): (1) ten percent (10%); or (2) five percent (5%) plus
the rate  established by the Federal  Reserve Bank of San  Francisco,  as of the
twenty-fifth  (25th) day of the month  immediately  preceding  the due date,  on
advances to member banks under Sections 13 and 13(a) of the Federal Reserve Act,
as now in  effect  or  hereafter  from  time to time  amended.  Payment  of such
interest  shall not excuse or cure any default by Tenant.  In  addition,  Tenant
shall pay all costs and  attorneys'  fees  incurred by Landlord in collection of
such amounts.


     On the last day of the Lease  Term,  or on the sooner  termination  of this
Lease,  Tenant  shall  surrender  the  Premises to  Landlord in their  condition
existing  as of the  Commencement  Date of this  Lease,  ordinary  wear and tear
excepted,  with all originally painted interior walls washed, and other interior
walls cleaned, and repaired or replaced,  all carpets shampooed and cleaned, the
air conditioning and heating equipment  serviced and repaired by a reputable and
licensed  service  firm,  all floors  cleaned and waxed,  all to the  reasonable
satisfaction of Landlord.  Tenant shall remove all of Tenant's personal property
and trade  fixtures from the Premises,  and all property not so removed shall be
deemed abandoned by Tenant. Tenant, at its sole cost, shall repair any damage to
the Premises caused by the removal of Tenant's personal property,  machinery and
equipment,  which repair shall  include,  without  limitation,  the patching and
filling of holes and repair of  structural  damage.  If the  Premises are not so
surrendered at the termination of this Lease,  Tenant shall  indemnify,  defend,
protect and hold Landlord harmless from and against loss or liability  resulting
from  delay  by  Tenant  in  so  surrendering  the  Premises  including  without
limitation,  any claims made by any succeeding  tenant or losses to Landlord due
to lost opportunities to lease to succeeding tenants.

     The undersigned  parties hereby warrant that they have proper authority and
are  empowered  to  execute  this  Lease  on  behalf  of  Landlord  and  Tenant,
respectively.
        
     This Lease is made subject to all matters of public record  affecting title
to the  property of which the  Premises  are a part.  Tenant  shall abide by and
comply with all private conditions,  covenants and restrictions of public record
now or hereafter affecting the Premises and any amendment thereof.

     All assessments and charges which are imposed,  levied or assessed  against
the Parcel and Buildings pursuant to the above-described  covenants,  conditions
and restrictions shall be a Common Area Charge and Tenant shall pay its share of
such assessments and charges to Landlord as provided in Paragraph 12 above.

     Tenant  represents  and warrants to Landlord that it has not dealt with any
broker  respecting this  transaction  (other than  CB/Richard  Ellis) and hereby
agrees to indemnify  and hold  Landlord  harmless from and against any brokerage
commission or fee, obligation,  claim or damage (including attorneys' fees) paid
or incurred respecting any broker (other than CB/Richard Ellis) claiming through
Tenant or with which/whom Tenant has dealt.
        
     Tenant, for itself and its successors and assigns (to the extent this Lease
is  assignable),  hereby  agrees  that in the event of any  actual,  or alleged,
breach or default by Landlord under this Lease that:
     A. Tenant's sole and exclusive  remedy against Landlord shall be as against
Landlord's interest in the Buildings and Parcel;
     B. No  partner of  Landlord  shall be sued or named in a party in a suit or
action (except as may be necessary to secure jurisdiction of the partnership);
     C. No service of process  shall be made  against  any  partner of  Landlord
(except as may be necessary to secure jurisdiction of the partnership);
     D. No partner of Landlord shall be required to answer or otherwise plead to
any service of process;
          E. No judgment will be taken against any partner of Landlord;
          F. Any judgment  taken  against any partner of Landlord may be vacated
     and set aside at any time nunc pro tunc;
          G. No writ of execution  will ever be levied against the assets of any
     partner of Landlord;
          H. The covenants and  agreements of Tenant set forth in this Paragraph
     38 shall be enforceable by Landlord and any partner of Landlord.

          Hazardous Material



          As  used  herein,  the  term  "Hazardous   Material"  shall  mean  any
     substance:  (i) the presence of which requires investigation or remediation
     under any federal, state or local statute,  regulation,  ordinance,  order,
     action,  policy  or common  law;  (ii)  which is or  becomes  defined  as a
     "hazardous  waste," "hazardous  substance,"  pollutant or contaminant under
     any  federal,  state or local  statute,  regulation,  rule or  ordinance or
     amendments  thereto  including,   without  limitation,   the  Comprehensive
     Environmental  Response,  Compensation and Liability Act (42 U.S.C. Section
     9601 et seq.) and/or the Resource  Conservation and Recovery Act (42 U.S.C.
     Section  6901  et  seq.);  (iii)  which  is  toxic,  explosive,  corrosive,
     flammable, infectious, radioactive,  carcinogenic,  mutagenic, or otherwise
     hazardous  and  is or  becomes  regulated  by any  governmental  authority,
     agency,  department,  commission,  board,  agency or instrumentality of the
     United  States,  the  State  of  California  or any  political  subdivision
     thereof;  (iv) the presence of which on the Premises causes or threatens to
     cause a nuisance  upon the Premises or to adjacent  properties  or poses or
     threatens  to pose a hazard to the  health or safety of persons on or about
     the  Premises;  (v) the  presence  of which on  adjacent  properties  could
     constitute a trespass by Landlord or Tenant;  (vi) without limitation which
     contains  gasoline,  diesel  fuel or other  petroleum  hydrocarbons;  (vii)
     without  limitation  which  contains   polychlorinated   biphenyls  (PCBs),
     asbestos or urea formaldehyde foam insulation; or (viii) without limitation
     radon gas.
          Subject  to  the   compliance   by  Tenant  with  the   provisions  of
     Subparagraphs  C, D, E, F, G, H, and I below,  Tenant shall be permitted to
     use and store on the Premises those Hazardous  Materials  listed in Exhibit
     "D" attached hereto, in the quantities set forth in Exhibit "D".
                
Hazardous Materials Management Plan

          (i) Prior to Tenant  using,  handling,  transporting  or  storing  any
     Hazardous Material at or about the Premises (including, without limitation,
     those listed in Exhibit  "D"),  Tenant shall submit to Landlord a Hazardous
     Materials  Management  Plan  ("HMMP") for  Landlord's  review and approval,
     which approval shall not be unreasonably withheld. The HMMP shall describe:
     (aa) the quantities of each material to be used, (bb) the purpose for which
     each material is to be used,  (cc) the method of storage of each  material,
     (dd) the method of transporting  each material to and from the Premises and
     within the Premises, (ee) the methods Tenant will employ to monitor the use
     of the material and to detect any leaks or potential hazards,  and (ff) any
     other information any department of any governmental entity (city, state or
     federal)  requires  prior to the  issuance of any  required  permit for the
     Premises or during  Tenant's  occupancy of the Premises.  Landlord may, but
     shall have no obligation  to review and approve the  foregoing  information
     and HMMP,  and such  review and  approval  or failure to review and approve
     shall not act as an estoppel or  otherwise  waive  Landlord's  rights under
     this Lease or  relieve  Tenant of its  obligations  under  this  Lease.  If
     Landlord  determines  in good faith by inspection of the Premises or review
     of the HMMP that the methods in use or described by Tenant are not adequate
     in Landlord's  good faith judgment to prevent or eliminate the existence of
     environmental  hazards,  then Tenant shall not use, handle,  transport,  or
     store such  Hazardous  Materials at or about the Premises  unless and until
     such  methods  are  approved  by  Landlord  in good  faith  and added to an
     approved HMMP. Once approved by Landlord, Tenant shall strictly comply with
     the HMMP and  shall not  change  its use,  operations  or  procedures  with
     respect to  Hazardous  Materials  without  submitting  an amended  HMMP for
     Landlord's review and approval as provided above.

          (ii)  Tenant  shall pay to Landlord  when  Tenant  submits an HMMP (or
     amended  HMMP) the amount  reasonably  determined  by Landlord to cover all
     Landlord's  costs and  expenses  reasonably  incurred  in  connection  with
     Landlord's review of the HMMP which costs and expenses shall include, among
     other things, all reasonable  out-of-pocket fees of attorneys,  architects,
     or other  consultants  incurred by Landlord in connection  with  Landlord's
     review of the HMMP. Landlord shall have no obligation to consider a request
     for consent to a proposed  HMMP  unless and until  Tenant has paid all such
     costs and  expenses to  Landlord,  and Tenant  shall pay all such costs and
     expenses  to Landlord  irrespective  of whether  Landlord  consents to such
     proposed HMMP.  Tenant shall pay to Landlord on demand the excess,  if any,
     of such costs and expenses actually incurred by Landlord over the amount of
     such  costs and  expenses  actually  paid by  Tenant,  and  Landlord  shall
     promptly  refund to Tenant the excess,  if any, of such costs and  expenses
     actually paid by Tenant over the amount of such costs and expenses actually
     incurred by Landlord.
                
          Except as specifically  allowed in Subparagraph B above,  Tenant shall
     not cause or permit any Hazardous Material to be used,  stored,  generated,
     discharged,  transported  to or  from,  or  disposed  of in  or  about  the
     Premises,  Building  or  Parcel or any other  land or  improvements  in the
     vicinity  of  the  Premises,  Building  or  Parcel.  Without  limiting  the
     generality of the foregoing,  Tenant,  at its sole cost,  shall comply with
     all Laws relating to the storage, use, generation, transport, discharge and
     disposal by Tenant or its Agents of any Hazardous Material. If the presence
     of any  Hazardous  Material on the  Premises,  Building or Parcel caused or
     permitted by Tenant or its Agents results in contamination of the Premises,
     Building  or Parcel or any soil,  air,  ground  or  surface  waters  under,
     through, over, on, in or about the Premises, Building or Parcel, Tenant, at
     its  expense,  shall  promptly  take all  actions  necessary  to return the
     Premises,  Building or Parcel and/or the  surrounding  real property to the
     condition existing prior to the appearance of such Hazardous  Material.  In
     the event there is a release,  discharge or disposal of or contamination of
     the Premises,  Building or Parcel by a Hazardous  Material  which is of the
     type  that has been  stored,  handled,  transported  or  otherwise  used or
     permitted  by Tenant or its Agents on or about the  Premises,  Building  or
     Parcel,  Tenant  shall  have the  burden  of  proving  that  such  release,
     discharge,  disposal  or  contamination  is not the  result  of the acts or
     omissions of Tenant or its Agents.
                
          Tenant shall defend, protect, hold harmless and indemnify Landlord and
     its  Agents  and  Lenders  with  respect  to all  actions,  claims,  losses
     (including,  diminution in value of the Premises),  fines, penalties,  fees
     (including,  but not limited to,  attorneys' and consultants'  fees) costs,
     damages,  liabilities,  remediation costs,  investigation  costs,  response
     costs and other expenses  arising out of,  resulting from, or caused by (i)
     any Hazardous Material used, generated, discharged, transported to or from,
     stored, or disposed of by Tenant or its Agents in, on, under, over, through
     or about the  Premises,  Building  or Parcel  and/or the  surrounding  real
     property or (ii) any disposal or release of any  Hazardous  Material on the
     surface of the Premises  occurring after the Commencement Date and prior to
     the  termination  of this  Lease.  Tenant  shall not  suffer any lien to be
     recorded  against the Premises,  Building or Parcel as a consequence of the
     disposal of any Hazardous Material on the Premises by Tenant or its Agents,
     including any so called  state,  federal or local "super fund" lien related
     to the "clean up" of any Hazardous  Material in, over, on, under,  through,
     or about the Premises.
                
          Tenant  shall  immediately  notify  Landlord  of  any  inquiry,  test,
     investigation,  enforcement proceeding by or against Tenant or the Premises
     concerning any Hazardous  Material.  Any remediation plan prepared by or on
     behalf of Tenant must be submitted to Landlord prior to conducting any work
     pursuant to such plan and prior to submittal to any  applicable  government
     authority and shall be subject to Landlord's  consent.  Tenant acknowledges
     that Landlord,  as the owner of the Premises,  at its election,  shall have
     the sole right to negotiate, defend, approve and appeal any action taken or
     order  issued  with  regard to any  Hazardous  Material  by any  applicable
     governmental authority.
                
          It shall not be  unreasonable  for Landlord to withhold its consent to
     any proposed  assignment or subletting  if (i)the  proposed  assignee's or
     subtenant's   anticipated  use  of  the  Premises   involves  the  storage,
     generation,   discharge,  transport,  use  or  disposal  of  any  Hazardous
     Material;  (ii) if the proposed  assignee or subtenant has been required by
     any prior  landlord,  lender or  governmental  authority  to "clean  up" or
     remediate  any  Hazardous  Material;  (iii)  if the  proposed  assignee  or
     subtenant is subject to investigation or enforcement order or proceeding by
     any  governmental   authority  in  connection  with  the  use,  generation,
     discharge, transport, disposal or storage of any Hazardous Material.

          Upon the expiration or earlier  termination of the Lease,  Tenant,  at
     its sole cost,  shall remove all  Hazardous  Materials  from the  Premises,
     Building or Parcel that Tenant or its Agents  introduced  to the  Premises,
     Building or Parcel.  If Tenant fails to so surrender the  Premises,  Tenant
     shall  indemnify,  protect,  defend  and hold  Landlord  harmless  from and
     against  all damages  resulting  from  Tenant's  failure to  surrender  the
     Premises as required by this Paragraph,  including, without limitation, any
     actions, claims, losses, liabilities,  fees (including, but not limited to,
     attorneys' and consultants' fees), fines, costs,  penalties,  or damages in
     connection   with  the  condition  of  the  Premises   including,   without
     limitation,  damages occasioned by the inability to relet the Premises or a
     reduction in the fair market  and/or rental value of the Premises by reason
     of the existence of any Hazardous Material in, on, over, under,  through or
     around the Premises.
                
          Landlord  shall have the right to appoint a  consultant  to conduct an
     investigation  to determine  whether any Hazardous  Material is being used,
     generated,  discharged,  transported to or from,  stored or disposed of in,
     on, over,  through,  or about the Premises,  in an  appropriate  and lawful
     manner.  If Tenant has violated any Law or covenant in this Lease regarding
     the use,  storage  or  disposal  of  Hazardous  Materials  on or about  the
     Premises,   Tenant   shall   reimburse   Landlord  for  the  cost  of  such
     investigation.  Tenant,  at its expense,  shall comply with all  reasonable
     recommendations of the consultant required to conform Tenant's use, storage
     or disposal of Hazardous Materials to the requirements of applicable Law or
     to fulfill the obligations of Tenant hereunder.
                
          If any action of any kind is required or  requested to be taken by any
     governmental  authority  to  clean-up,  remove,  remediate  or monitor  any
     Hazardous  Material  (the  presence  of which is the  result of the acts or
     omissions of Tenant or its Agents) and such action is not  completed  prior
     to the  expiration  or earlier  termination  of the Lease,  Tenant shall be
     deemed to have  impermissibly  held over until  such time as such  required
     action is completed, and Landlord shall be entitled to all damages directly
     or  indirectly  incurred in connection  with such holding  over,  including
     without  limitation,  damages  occasioned  by the  inability  to re-let the
     Premises  or a  reduction  of the fair market  and/or  rental  value of the
     Premises.
          The  provisions of this  Paragraph 39 shall survive the  expiration or
     termination of this Lease.

          The  provisions of this Paragraph 39 are intended to govern the rights
     and liabilities of the Landlord and Tenant hereunder  respecting  Hazardous
     Materials to the exclusion of any other provisions in this Lease that might
     otherwise be deemed  applicable.  The provisions of this Paragraph 39 shall
     be  controlling  with  respect  to any  provisions  in this  Lease that are
     inconsistent with this Paragraph 39.
        
     Third Opportunity to Lease 1390 Villa Street.

          A.  Tenant  acknowledges  that  Landlord  has  previously  granted  to
     Mayfield  Publishing  Company  ("Mayfield")  and to Neuron Data  ("Neuron")
     rights to lease the premises  containing  approximately  six thousand three
     hundred  twenty-eight  (6,328)  square feet known as 1390 Villa Street (the
     "Expansion Space") which rights are prior to the rights hereinafter granted
     to Tenant with respect to the Expansion Space.



          B.  Grant of Third  Opportunity  to  Lease.  If (i)  Tenant  is not in
     default  under this  Lease;  (ii) this  Lease is in full force and  effect;
     (iii) Tenant has not assigned this Lease and is in physical occupancy of at
     least fifty percent (50%) of the area of the Premises; and (iv) no existing
     tenant  of the  Expansion  Space  has  elected  to  continue  to Lease  the
     Expansion  Space after the  expiration  of such existing  tenant's  current
     lease;  and (iv) neither Mayfield nor Neuron has exercised their respective
     prior rights to lease the Expansion  Space,  then, and only then,  when the
     Expansion Space becomes  available for lease,  Landlord shall notify Tenant
     in writing  ("Landlord's  Notice") of the form of lease Landlord intends to
     use and the following  basic  business terms upon which Landlord is willing
     to lease such  space  (the  "Basic  Business  Terms"):  (i) the term of the
     lease;  (ii) the  tenant  improvements,  if any,  Landlord  is  willing  to
     construct or the  contribution  Landlord is willing to make to pay for such
     tenant improvements,  if any, (iii) the rent for the term or the formula to
     be used to determine  such rent;  (iv) the  commencement  date of the lease
     term and (iv) any other business terms Landlord elects to specify.

          C. Second  Lease.  If Tenant,  within  five (5) days after  receipt of
     Landlord's  Notice  notifies  Landlord in writing of Tenant's  agreement to
     lease the Expansion  Space on the Basic Business Terms stated in Landlord's
     Notice (the  "Second  Lease"),  and,  within  five (5) days after  Tenant's
     receipt of the Second Lease from Landlord,  Tenant  executes and returns to
     Landlord the Second Lease,  then Landlord  shall lease to Tenant and Tenant
     shall lease from Landlord the Expansion  Space on the terms and  conditions
     contained in the Second Lease; provided,  however, that this Lease shall be
     modified to include,  and the Second Lease shall include,  a  cross-default
     provision  providing  that Tenant will be in default  under both the Second
     Lease and this Lease if Tenant is in default under either lease.

          D. Failure to Exercise.  If Tenant does not notify Landlord in writing
     of Tenant's  agreement to lease the Expansion  Space on the terms contained
     in Landlord's Notice within the five (5) day time period, or if Tenant does
     not execute and return to Landlord  the Second  Lease  within five (5) days
     after Tenant's  receipt  thereof,  then Landlord shall  thereafter have the
     unfettered right to lease the Expansion Space to a third party on any terms
     as Landlord may determine.


IN WITNESS WHEREOF,  the parties have executed this Lease on the dates set forth
below.


                                                          TENANT:

                                                          PSW TECHNOLOGIES, INC.
                                                          a Delaware corporation



DATED: __________________                    By: \s\ W. Frank King
                                           Name: Dr. W. Frank King
                                          Title: Cheif Executive Officer

DATED: __________________                   By: \s\ Julie Kirk
                                          Name: Julie Kirk
                                         Title: Vice President, Human Resources







                                                            LANDLORD:

                                                 SOUTH BAY/COPLEY JOINT VENTURE,
                                                a California general partnership

                                    By:      Metropolitan Life Insurance Company
                                             on behalf of its Developmental
                                             Properties Account General Partner


                                    By:      AEW Real Estate Advisor, Inc.,
                                             a Massachusetts corporation,
                                             its duly authorized asset
                                             manager and advisor

DATED: ____________________         By:  

                                  Name:  
                                 Title: 


                                   EXHIBIT "A"

                                    Site Plan
                       (showing Premises as cross-hatched)





                                   EXHIBIT "B"

                           Legal Description of Parcel






                                   EXHIBIT "C"

                            Tenant Improvements to be
                         Constructed by Landlord, if any


          Landlord shall carpet and paint the Premises with Landlord's  standard
     paint and carpet.  Landlord's  standard  carpet is 26 oz. level loop or cut
     pile (not to exceed $14.50 per square yard, installed). Landlord's standard
     paint shall be one color, exclusive of any accent colors.


                                   EXHIBIT "D"

             List of Hazardous Materials Tenant will use on Premises
                             (if none, write "none")







        TYPE OF MATERIAL                                    QUANTITY








                                 LEASE AGREEMENT


                                 by and between


                         SOUTH BAY/COPLEY JOINT VENTURE,
                        a California general partnership,


                                   as LANDLORD



                                       and



                                PSW TECHNOLOGIES
                             a Delaware corporation,


                                    as TENANT



                             for Premises located at

                                1380 Villa Street
                            Mountain View, California



<TABLE>
<CAPTION>

                                             


<S>                                                                                                              <C>
1.      Parties...................................................................................................1

2.      Demise of Premises........................................................................................1

3.      Term......................................................................................................1

4.      Rent......................................................................................................1
        A.      Time of Payment...................................................................................1
        B.      Monthly Installment...............................................................................2
        C.      Late Charge.......................................................................................2
        D.      Additional Rent...................................................................................2
        E.      Place of Payment..................................................................................2
        F.      Advance Payment...................................................................................2

5.      Security Deposit..........................................................................................2

6.      Use of Premises...........................................................................................3

7.      Taxes and Assessments.....................................................................................3
        A.      Tenant's Property.................................................................................3
        B.      Property Taxes....................................................................................3
        C.      Other Taxes.......................................................................................4

8.      Insurance.................................................................................................4
        A.      Indemnity.........................................................................................4
        B.      Liability Insurance...............................................................................4
        C.      Property Insurance................................................................................5
        D.      Tenant's Insurance; Release of Landlord...........................................................5
        E.      Mutual Waiver of Subrogation......................................................................5

9.      Utilities.................................................................................................5

10.     Repairs and Maintenance...................................................................................6
        A.      Landlord's Repairs................................................................................6
        B.      Tenant's Repairs..................................................................................6

11.     Common Area...............................................................................................7

12.     Common Area Charges.......................................................................................7

13.     Alterations...............................................................................................8

14.     Acceptance of the Premises................................................................................8

15.     Default...................................................................................................8
        A.      Events of Default.................................................................................8
        B.      Remedies..........................................................................................9

16.     Destruction..............................................................................................11

17.     Condemnation.............................................................................................11
        A.      Definition of Terms..............................................................................11
        B.      Rights...........................................................................................12
        C.      Total Taking.....................................................................................12
        D.      Partial Taking...................................................................................12

18.     Mechanics' Lien..........................................................................................12

19.     Inspection of the Premises...............................................................................12

20.     Compliance with Laws.....................................................................................12

21.     Subordination............................................................................................13
        A.      Priority.........................................................................................13
        B.      Subsequent Security Instruments..................................................................13
        C.      Documents........................................................................................13
        D.      Tenant's Attornment..............................................................................13
        E.      Lender...........................................................................................13

22.     Holding Over.............................................................................................13

23.     Notices..................................................................................................14

24.     Attorneys' Fees..........................................................................................14

25.     Nonassignment............................................................................................14
        A.      Landlord's Consent Required......................................................................14
        B.      Transferee Information Required..................................................................14

26.     Successors...............................................................................................15

27.     Mortgagee Protection.....................................................................................15

28.     Landlord Loan or Sale....................................................................................15

29.     Surrender of Lease Not Merger............................................................................16

30.     Waiver...................................................................................................16

31.     General..................................................................................................16
        A.      Captions.........................................................................................16
        B.      Definition of Landlord...........................................................................16
        C.      Time of Essence..................................................................................16
        D.      Severability.....................................................................................16
        E.      Joint and Several Liability......................................................................16
        F.      Law..............................................................................................16
        G.      Agent............................................................................................16
        H.      WAIVER OF JURY TRIAL.............................................................................17

32.     Sign.....................................................................................................17

33.     Interest on Past Due Obligations.........................................................................17

34.     Surrender of the Premises................................................................................17

35.     Authority................................................................................................18

36.     Public Record............................................................................................18

37.     Brokers..................................................................................................18

38.     Limitation on Landlord's Liability.......................................................................18

39.     Hazardous Material.......................................................................................18
        A.      Definitions......................................................................................18
        B.      Permitted Use....................................................................................19
        C.      Hazardous Materials Management Plan..............................................................19
        D.      Use Restriction..................................................................................20
        E.      Tenant Indemnity.................................................................................20
        F.      Compliance.......................................................................................20
        G.      Assignment and Subletting........................................................................20
        H.      Surrender........................................................................................20
        I.      Right to Appoint Consultant......................................................................21
        J.      Holding Over.....................................................................................21
        K       Provisions Survive Termination...................................................................21
        L.      Controlling Provisions...........................................................................21




40.     Third Opportunity to Lease 1389 Villa Street.............................................................21

</TABLE>